Meralco set to hit P18.5-b profit goal

Power retailer Manila Electric Co. is expected to achieve its core net income target of P18.5 billion in 2015, on the back of a 5-percent growth in electricity sales, a ranking official said.

“Certainly, in terms of meeting its guidance number for the full year, there’s a good chance that number can be met,” Meralco chairman Manuel Pangilinan told reporters.

He said company’s core net income would “most likely” reach its target given the stronger sales starting in May.

Meralco posted a core net income of P18.1 billion in 2014, up 6 percent from 2013.

“Surprisingly, the volume of power sold has risen starting May this year, such that the year to date is five-percent growth, slightly ahead of our expectations and ahead of what historic growth rate of power sold by Meralco has been which is typically around 3 percent,” Pangilinan said.

Meralco reported a core net income of P15.8 billion in the first nine months, up 11 percent from P14.286 billion registered in the same period last year.

Reported net income also grew 13 percent to P16.1 billion from a year earlier. Reported income is adjusted to exclude the effects of foreign exchange gains or losses, mark-to-market adjustments and other one-time, exceptional transactions.

Meralco, however, recorded a lower core net income in the third quarter at P4.15 billion, compared to P4.4 billion in the same quarter last year.

Reported net income also declined to P4.4 billion from P4.671 billion on lower distribution rate.

The lower interim average rate implemented at the start of the fourth regulatory period on July 1, 2015 resulted in a lower average distribution rate of P1.52 per kWh in the nine-month period, compared to P1.63 per kWh in 2014.

Meralco president Oscar Reyes earlier said total volume of electricity distributed grew by almost 5 percent in the first nine months, largely attributable to the strong demand from all customer classes on account of new customer connections, particularly residential and commercial, increased economic activities and benign inflation.

Sales volumes increased across all customer classes, with the residential and commercial segments growing at 6 percent each.

Industrial segment was up 3 percent. The commercial segment accounts for 40-percent of total demand while residential and industrial segments account for 30 percent, each.

Reyes said increased sales of real estate, retail trade and hotel and entertainment industries contributed to the larger portion of the increase in commercial sales.

The growth in sales volume in September 2015 alone was 8 percent, the third highest growth in the first nine months of 2015.

Increased production in the food and beverage, basic metals, and electricity, gas and water industries in anticipation of the December holiday season boosted industrial sales volumes.

Billed customers grew by 209,000 to 5.7 million, reflecting an increase of almost 4 percent year-on-year.